{"id":179987,"date":"2024-12-22T21:08:57","date_gmt":"2024-12-23T04:08:57","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=179987"},"modified":"2024-12-22T21:09:00","modified_gmt":"2024-12-23T04:09:00","slug":"small-town-short-term-rentals-are-usually-better-than-big-city-rentals","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/small-town-short-term-rentals-are-usually-better-than-big-city-rentals","title":{"rendered":"I Bought a Short-Term Rental in a Small Town\u2014Here\u2019s Why It Outperforms Big City Properties"},"content":{"rendered":"\n<p><span data-preserver-spaces=\"true\">When people consider short-term rental (STR) investments, their minds often jump to properties in booming metropolitan areas or HOA-restricted neighborhoods. Big cities come with high demand, tourist attractions, and business travelers.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">However, as someone who has invested in both urban and small-town STRs, I\u2019ve found that smaller towns can outperform big-city properties in key areas like profitability, guest satisfaction, and ease of management. Here&#8217;s how my small-town <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.baselane.com\/resources\/ideal-business-travel-residences\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">STR business<\/span><\/a><span data-preserver-spaces=\"true\"> stands out\u2014and how financial tools like the ones offered by our partners at <\/span><a class=\"editor-rtfLink\" href=\"http:\/\/www.baselane.com\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Baselane<\/span><\/a><span data-preserver-spaces=\"true\"> help make the process smoother.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Why a Small Town?<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">The decision to invest in a small town wasn\u2019t random. I used a data-driven approach to pinpoint a location that balanced affordability, year-round demand, and unique guest experiences.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">To guide my search, I applied my 60\/30\/10 rule:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">60 minutes or less from a major city with a population of 500,000 or more, ensuring accessibility for weekend travelers.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">30 minutes or less from regional, state, or national attractions, like parks, lakes, or wineries, to draw steady guest interest.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">10 minutes from essential services, such as gas stations, grocery stores, or restaurants, to ensure guest convenience.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span data-preserver-spaces=\"true\">This framework helps ensure that any property I consider will have strong demand drivers and practical amenities nearby.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Advantages of Small-Town STRs<\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">1. Lower acquisition costs<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">In big cities, property prices can be astronomical. For the same investment that gets you a studio in a city, you could often purchase a spacious, multi-bedroom property in a small town. Lower costs mean a smaller mortgage and lower financial risk, leaving more room for profit.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">2. Higher return on investment (ROI)<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">Small-town STRs often see higher occupancy <\/span><span data-preserver-spaces=\"true\">rates<\/span><span data-preserver-spaces=\"true\"> and average daily rates (ADR) due to less competition. Additionally, the yield (annual revenue divided by median home price) in small towns often outpaces urban areas. With less supply and consistent demand, pricing power is on your side.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">3. Less regulation stress<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">Many big cities are cracking down on short-term rentals with strict regulations, expensive permits, and rental day caps. In contrast, small towns often welcome STRs for the economic boost they bring to the community.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">4. Unique guest experiences<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">Travelers are increasingly looking for unique stays, and small towns are often close to natural attractions, historic sites, or outdoor activities. My STRs offer a peaceful retreat that urban properties can\u2019t replicate, resulting in happier guests and glowing reviews.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">How Small Towns Drive Profitability<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">My property is in a charming town with a population under 10,000. Despite its size, it\u2019s near a popular state park and several wineries. While the big-city properties I\u2019ve owned relied on volume to drive profits, my small-town STR thrives on premium pricing and extended stays.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Here\u2019s why it works:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">Fewer one-night stays:<\/span><\/strong><span data-preserver-spaces=\"true\"> Guests typically book longer stays in small towns, which reduces cleaning and turnover costs.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Attracting niche travelers:<\/span><\/strong><span data-preserver-spaces=\"true\"> My STR caters to couples looking for romantic getaways, nature enthusiasts, and families attending local events.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Loyalty and word of mouth: <\/span><\/strong><span data-preserver-spaces=\"true\">Small towns&#8217; sense of community encourages repeat visitors. Many of my guests return annually and recommend my property to friends.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Why Data-Driven Decisions Matter<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Investing in a small town isn\u2019t about guessing but understanding the market dynamics. Before purchasing, I looked at tools like AirDNA to assess metrics like average daily rate, occupancy rates, and annual revenue.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">For small towns, it\u2019s crucial to focus on:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">Seasonality: <\/span><\/strong><span data-preserver-spaces=\"true\">Understand when the market peaks and dips to adjust pricing and manage expectations.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Local attractions:<\/span><\/strong><span data-preserver-spaces=\"true\"> Ensure a steady flow of visitors year-round, not just during a single season.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Market saturation: <\/span><\/strong><span data-preserver-spaces=\"true\">Fewer STRs in a small town often mean less competition, but ensuring enough demand to support additional properties is essential.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span data-preserver-spaces=\"true\">Combining this data with the 60\/30\/10 rule ensured my investment was well-located and poised for consistent bookings.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Simplifying Small-Town STR Management<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">While small-town STRs outperform big-city properties in profitability, managing them requires attention to detail. That\u2019s where Baselane comes in. I rely on Baselane\u2019s all-in-one banking, bookkeeping, and accounting software to ensure my finances are in order.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Here\u2019s how it helps:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">Streamlined expense tracking:<\/span><\/strong><span data-preserver-spaces=\"true\"> With Baselane\u2019s auto-tagging feature, all my STR-related expenses are categorized instantly, with no manual effort from me. Whether it\u2019s a new set of sheets or a local repair bill, Baselane organizes it automatically.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Stress-free tax prep:<\/span><\/strong><span data-preserver-spaces=\"true\"> Tax season used to be a headache.<\/span><span data-preserver-spaces=\"true\"> Now, Baselane creates a tax package tailored for my CPA, complete with categorized expenses and detailed reports. This feature has saved countless hours and helped me avoid potential mistakes.<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Easy banking for STR owners:<\/span><\/strong><span data-preserver-spaces=\"true\"> I use <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.baselane.com\/airbnb-hosts\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Baselane\u2019s banking services<\/span><\/a><span data-preserver-spaces=\"true\"> to separate my STR finances from my <\/span><span data-preserver-spaces=\"true\">personal<\/span><span data-preserver-spaces=\"true\"> accounts. A dedicated STR account simplifies cash flow tracking, and I can create multiple subaccounts to make planning for property improvements or expansions easier.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Common Concerns About Small-Town STRs<\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What if there\u2019s no demand?<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">Research is key. I chose a location with year-round attractions and seasonal events. Tools like AirDNA and local tourism reports helped me understand demand patterns before purchasing.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Are small towns harder to market?<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">Not at all! Marketing is easier if you leverage the area&#8217;s unique charm. I focus on high-quality photos, SEO-friendly Airbnb listings, and partnerships with local businesses to attract guests.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Do small-town STRs have limited growth potential?<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">Growth opportunities are abundant<\/span><span data-preserver-spaces=\"true\">, <\/span><span data-preserver-spaces=\"true\">but <\/span><span data-preserver-spaces=\"true\">they<\/span><span data-preserver-spaces=\"true\"> will not have the same appreciation rate as a <\/span><span data-preserver-spaces=\"true\">major<\/span><span data-preserver-spaces=\"true\"> city.<\/span><span data-preserver-spaces=\"true\"> The advantage is the higher possible cash flow rates. I\u2019ve seen consistent revenue increases by reinvesting in amenities such as hot tubs or fire pits and building strong guest relationships that lead to repeat bookings.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What\u2019s Next for Small-Town STRs?<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Small-town STRs represent an exciting opportunity for investors willing to think outside the box. As regulations in big cities become more restrictive, demand for unique, off-the-beaten-path accommodations will only grow. I plan to expand my portfolio with more properties in similar markets and have now learned the first steps to take in almost any market.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Small-Town Thoughts<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Investing in a small-town STR has been one of my best decisions. Applying the 60\/30\/10 rule, analyzing local data, and using tools like <\/span><a class=\"editor-rtfLink\" href=\"http:\/\/baselane.com\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Baselane<\/span><\/a><span data-preserver-spaces=\"true\"> to streamline financial management, I\u2019ve turned a quiet, small-town property into a highly profitable investment.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>When people consider short-term rental (STR) investments, their minds often jump to properties in booming metropolitan areas or HOA-restricted neighborhoods. Big cities come with high demand, tourist attractions, and business [&hellip;]<\/p>\n","protected":false},"author":613755,"featured_media":179992,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7271],"tags":[],"class_list":["post-179987","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-short-term-rentals"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/179987","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613755"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=179987"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/179987\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/179992"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=179987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=179987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=179987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}